On April 25, 2025, FERC approved two uncontested stipulation and agreements that propose to settle the Natural Gas Act (“NGA”) section 4 general rate cases filed on May 30, 2024, by two interconnected pipelines, Algonquin Gas Transmission, LLC (“Algonquin”) and Maritimes & Northeast Pipeline, L.L.C. (“Maritimes”). Both settlements established a 13.5% return on equity (“ROE”) for the calculation of rates for new incremental expansion projects following the settlements’ effective dates, and for the equity component of Allowance for Funds Used During Construction (“AFUDC”).
S. Jennifer Panahi
Order No. 1920-B Affirms FERC’s Long-Term Transmission Planning and Cost Allocation Rule
On April 11, 2025, FERC issued Order No. 1920-B, which clarified and maintained key requirements from Order No. 1920-A regarding long-term transmission planning and cost allocation. FERC clarified that transmission providers are not obligated to plan for the long-term needs of unenrolled non-jurisdictional transmission providers, but voluntary arrangements are allowed. The order also upheld the requirement for transmission providers to include Relevant State Entities’ agreed-upon cost allocation methods in their compliance filings. Additionally, FERC sustained the consultation requirement with Relevant State Entities before amending cost allocation methods. Lastly, FERC declined to expand the definition of “Relevant State Entity” and rejected certain rehearing requests as procedurally barred. Overall, FERC explained that Order No. 1920-B reinforces the importance of long-term, forward-looking, and comprehensive transmission planning and cost allocation processes to meet the demands of the modern transmission grid. The order was approved by four Commissioners, with Commissioner See not participating.
D.C. Circuit Denies Healthy Gulf’s and Sierra Club’s Petition for Review of FERC Order Authorizing Construction and Operation of Two New Natural Gas Pipelines
On March 28, 2025, the D.C. Circuit denied a joint petition for review brought by Healthy Gulf and Sierra Club (together, “Petitioners”) challenging FERC’s grant of a certificate of public convenience and necessity (CPCN) to Driftwood Pipeline LLC (Driftwood) to construct two new natural gas pipelines (the “Project”) in southwestern Louisiana on grounds that FERC’s decision failed to comply with National Environmental Policy Act (NEPA) and the Natural Gas Act (NGA). The D.C. Circuit affirmed FERC’s analyses under NEPA and NGA but declined to address Driftwood’s claim that the Council on Environmental Quality’ (CEQ) regulations implementing NEPA, upon which Petitioners based their arguments, are not judicially enforceable because CEQ lacks authority to promulgate them.
FERC Accepts SPP’s Tariff Revisions Incorporating a Mark-to-Auction Mechanism for SPP’s Transmission Congestion Rights Market
On March 20, 2025, FERC approved Southwest Power Pool, Inc.’s (“SPP”) tariff revisions to incorporate a mark-to-auction collateral requirement for SPP’s Transmission Congestion Rights (“TCR”) market. In doing so, FERC found the revisions will mitigate market risk caused by market participants’ declining TCR values. However, the Commission declined SPP’s request to terminate the related ongoing show cause proceeding because the proposed tariff does not fully address the Commission’s concerns.
FERC Announces Commissioner-led Technical Conference on Resource Adequacy in RTOs/ISOs
On February 20, 2025, FERC Chairman Mark Christie announced an upcoming Commissioner-led technical conference on resource adequacy in Regional Transmission Organization (“RTO”) and Independent System Operator (“ISO”) regions. The technical conference will take place over two days at FERC headquarters in Washington, D.C. on June 4, 2025, and June 5, 2025.
FERC Reinstates Authorization for Transco Pipeline Expansion Project
On January 24, 2025, FERC reinstated a certificate of public convenience and necessity (“CPCN”) for Transcontinental Gas Pipe Line Company’s (“Transco”) Regional Energy Access Expansion Project (“Project”) after the D.C. Circuit vacated and remanded FERC’s initial order certificating the Project (“Certificate Order”).
In January 2023, FERC granted Transco a CPCN…
Court Finds FERC Appropriately Evaluated Decision to Retain Dams in License Surrender
On January 14, 2025, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) held that FERC complied with the National Environmental Policy Act (“NEPA”) in approving the surrender of a hydroelectric project license. The court found that FERC had adequately considered the alternative of dam removal and determined that keeping the dams in place outweighed any potential benefits to recreation, fisheries, and other environmental concerns. The case, American Whitewater v. FERC, involved a challenge to FERC’s license surrender decision regarding the Somersworth Hydroelectric Project (“Project”) on the Salmon Falls River, which spans the border between New Hampshire and Maine.
FERC Issues Nearly $1B Market Manipulation Penalty Regarding Alleged Energy Efficiency Projects
On December 16, 2024, the Federal Energy Regulatory Commission (“FERC”) directed American Efficient, LLC, its subsidiaries, and corporate parents (collectively, “American Efficient”) to show cause why American Efficient should not be found to have violated anti-manipulation rules. The order alleges that American Efficient engaged in a manipulative scheme to extract millions of dollars in capacity payments from Midcontinent Independent System Operator, Inc. (“MISO”) and PJM Interconnection, L.L.C. (“PJM”) for energy efficiency projects that did not actually reduce energy use. FERC also requested American Efficient to show cause why they should not disgorge over $253 million in unjust profits and pay a civil penalty of $722 million.
High-Level Summary of FERC Order No. 1920-A on Transmission Planning and Cost Allocation
On November 21, 2024, FERC issued Order No. 1920-A, which modified Order No. 1920 to expand the states’ roles in long-term transmission planning and clarified requirements for such planning as set forth in Order No. 1920. FERC made changes in three broad areas, amongst many other modifications: (1) expanding the role of state entities in the transmission planning process, (2) requiring transmission providers to create additional transmission planning scenarios to inform implementation of cost allocation methods upon the request of state entities, and (3) removing the requirement for transmission providers to include corporate financial commitments in Factor Category Seven when developing long-term transmission planning scenarios.
Federal Appeals Court Appears Skeptical of State’s Ability to Question Federal Transmission Planning Decisions
On December 5, 2024, the U.S. Court of Appeals for the Third Circuit heard oral arguments in Transource Pennsylvania LLC v. Steven M. Defrank, et.al. The case presents the question of potential tension between FERC’s exclusive authority over transmission planning and a state’s siting authority. The court has not yet decided the case.